FUTURES MARKETS

Published: January 19, 1994

Hog and heating-oil futures prices fell sharply yesterday on expectations that livestock shipments will rise and fuel demand will ease as the cold snap ends in the Eastern United States.

The drop in hog prices dragged other livestock futures lower on the Chicago Mercantile Exchange. Crude oil weakened along with heating oil on the New York Mercantile Exchange.

Live hogs for February delivery sank 0.75 cent, to 47.77 cents a pound. February live cattle tumbled 0.62 cent, to 73.50 cents a pound; January feeder cattle fell 0.18 cent, to 83.57 cents a pound, and February frozen pork bellies rose 0.20 cent, to 56.27 cents a pound.

Hog futures rose 0.65 cent Monday as traders reasoned that bitterly cold weather in the Midwest would prompt farmers to curtail shipments of animals for fear of illness or death. Slaughtering Slows

In fact, a slowdown did occur. The Agriculture Department estimated that meatpackers slaughtered 227,000 hogs Monday and 188,000 yesterday at a time when the normal daily slaughter has been 330,000 to 350,000 animals.

Those hogs will go on the market as temperatures moderate, causing a temporary supply bulge, said Chuck Levitt, an analyst with the Alaron Trading Corporation in Chicago.

"It will be like trying to fit 10 hogs into a 5-hog bag," he said.

In a bit of positive news for the pork market, the Department of Agriculture said after the close of trading that it had selected nations of the former Soviet Union for subsidized sales of 20,000 metric tons, or about 40.5 million pounds, of domestic pork.

On other markets, heating oil futures plunged in New York after climbing Monday to an 11-week high.

"There was a slight moderation of temperature here in the Northeast and it seemed that we saw a fair amount of profit taking," said Gerald Samuels, managing director of ARB Oil Inc. in New York.

Wheat futures fell sharply on the Chicago Board of Trade as a bigger-than-expected Australian production estimate touched off profit taking. Most other grain and soybean futures also fell.

Wheat for March delivery tumbled 8 1/2 cents, to $3.7575 a bushel; March corn fell 6 cents, to $3.0125 a bushel; March oats dropped 1.75 cents, to $1.37 a bushel, and January soybeans slipped a half-cent, to $7.02 a bushel.